Commerce Accountancy · Law Legal Studies

Business Organizations and Corporate Governance

1,376 Questions

Business organizations and corporate governance explore company structures, stakeholder responsibilities, and regulatory frameworks under the Companies Act. These commerce topics are essential for Chartered Accountancy, company secretary exams, and banking probationary officer assessments. Practice these questions to master corporate formation, director roles, and business ownership types.

Companies Act 2013 provisionsCorporate stakeholder rolesPrivate limited company rulesDebenture holder rightsCompany incorporation rulesState-owned enterprises

Business Organizations and Corporate Governance Questions

Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

State the following statement is True or False:
A public company can start business after getting 'Trading Certificate'.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A public company can start business after getting "trading certificate". Without trading certificate, all the contracts would be considered void in the eyes of law and operations of business cannot be carried out.

Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Legal controls, restrictions are more & strict on public companies ____________.

  1. True

  2. False

  3. Not relevant

  4. Nothing applicable
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Public companies are subject to more stringent regulatory oversight, disclosure requirements, and legal controls compared to private companies to protect public investors.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

State the following statement is True or False:
Shareholders take initiative to form a company.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is not true that shareholders take initiative to form a company. Shareholders are the one who invests in the company and helps in the capital formation of company. Entrepreneur initiates to form a company with the help of Promoters.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

State the following statement is True or False:
The certificate required by public limited company to start business activities is the certificate of commencement of business.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A public limited company must obtain a certificate of commencement of business from the Registrar of Companies before it can start its business operations.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Fill in the blank:
A company which can start its business only after securing the certificate of commencement of business is a ____________.

  1. public company

  2. private company

  3. Joint stock company

  4. Co-operative society
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Only public companies are required to secure a certificate of commencement of business before starting operations, as they raise capital from the general public.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the term or a phrase which can substitute the following statement:
Name the company which raises it's capital by issuing shares to public.

  1. Joint stock company

  2. Private company

  3. Public company

  4. Government organisation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A public company is defined by its ability to invite the public to subscribe to its shares, distinguishing it from a private company.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the term or a phrase which can substitute the following statement:
Name the type of company which can start it's business after securing 'Trading Certificate'?

  1. Private company

  2. Public company

  3. Sole proprietorship

  4. Joint stock company
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A public company, has to goes through the capital subscription stage and then receives the certificate of commencement. Only after obtaining the trading certificate, a public company can commence its business.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

State the following statements is True or False.

Every public company must hold a statutory meeting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Every public company that is a limited company and has a share capital shall, within a period of not less than one month and not more than three months after the date at which it is entitled to commence business, hold a general meeting of the members of the company to be called the "statutory meeting".

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public
The statutory meeting is compulsory for a public company .

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Every public company that is a limited company and has a share capital shall, within a period of not less than one month and not more than three months after the date at which it is entitled to commence business, hold a general meeting of the members of the company to be called the "statutory meeting"

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the correct option given below:

The quorum for general meeting of a public company according to the Companies Act, 1956 is _______.

  1. 2

  2. 5

  3. 8

  4. 10
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the Companies Act, 1956, the quorum for a general meeting of a public company depends on the number of members, but 5 is the standard answer often cited in older textbooks for specific meeting types.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

State the following statements is True or False:

The first general meeting of a public company is the Statutory meeting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The statutory meeting is the first formal general meeting held by a public company after its incorporation.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the option from the option choices given in below and re-write the completed sentences:
A public company may adopt _____ in place of Articles of Association.

  1. Table A

  2. Memorandum of Association

  3. Prospectus

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
The Articles of Association are drawn for internal administration of the Company. The articles of the company, besides containing the regulations of the company shall also include such additional matters as may be necessary for its management.

Under Companies Act, 1956, it was not mandatory for a public company limited by shares to have its Articles, as it could adopt the entire Table A of its articles; however under Companies Act, 2013, it is mandatory for every company to have its own articles.
Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the option from the option choices given in below and re-write the completed sentences:
A _________ company must issue prospectus to the public for capital subscription.

  1. statutory

  2. private

  3. public

  4. government
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Prospectus is a detailed statement that must be issued by a company that goes public. It is an invitation to the member of the public. It includes any notice, circular, advertisement inviting deposits from the public. Hence, a public company must issue prospectus to the public for capital subscription.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Fill in the blanks:
A public company must publish ________ for raising capital.

  1. prospectus

  2. articles of association

  3. memorandum of association

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Sec. 2(36) of the Companies Act describes a prospectus as “any document issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any share in, or debentures of a body corporate.”

In other words, it is a document which invites deposits from the public or invites offers from the public for the subscription of shares in, or debentures of, a company. The words “inviting deposits from the public” were added by the Companies (Amendment) Act, 1974.
Thus a public company must publish prospectus for raising capital.